Correlation Between Snap One and Arrow Electronics
Can any of the company-specific risk be diversified away by investing in both Snap One and Arrow Electronics at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Snap One and Arrow Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap One Holdings and Arrow Electronics, you can compare the effects of market volatilities on Snap One and Arrow Electronics and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Snap One with a short position of Arrow Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap One and Arrow Electronics.
Diversification Opportunities for Snap One and Arrow Electronics
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Snap and Arrow is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Snap One Holdings and Arrow Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Electronics and Snap One is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Snap One Holdings are associated (or correlated) with Arrow Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Electronics has no effect on the direction of Snap One i.e., Snap One and Arrow Electronics go up and down completely randomly.
Pair Corralation between Snap One and Arrow Electronics
Given the investment horizon of 90 days Snap One Holdings is expected to generate 0.05 times more return on investment than Arrow Electronics. However, Snap One Holdings is 18.87 times less risky than Arrow Electronics. It trades about 0.19 of its potential returns per unit of risk. Arrow Electronics is currently generating about -0.04 per unit of risk. If you would invest 1,072 in Snap One Holdings on August 24, 2024 and sell it today you would earn a total of 3.00 from holding Snap One Holdings or generate 0.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 12.0% |
| Values | Daily Returns |
Snap One Holdings vs. Arrow Electronics
Performance |
| Timeline |
| Snap One Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Arrow Electronics |
Snap One and Arrow Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap One and Arrow Electronics
The main advantage of trading using opposite Snap One and Arrow Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap One position performs unexpectedly, Arrow Electronics can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Arrow Electronics will offset losses from the drop in Arrow Electronics' long position.| Snap One vs. Climb Global Solutions | Snap One vs. Insight Enterprises | Snap One vs. ScanSource | Snap One vs. Synnex |
| Arrow Electronics vs. Insight Enterprises | Arrow Electronics vs. Synnex | Arrow Electronics vs. Climb Global Solutions | Arrow Electronics vs. ScanSource |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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